To make the red capsicum sauce, process all the ingredients in a small food processor until smooth. Season and transfer to a serving bowl.
Place flour and egg in separate bowls. Combine breadcrumbs, parmesan and parsley in a third bowl. Lightly toss mozzarella in flour, dip in egg and coat in breadcrumb mixture. Place onto a tray. Re-coat with egg and breadcrumbs. Freeze for 20 minutes.
Add enough oil in a medium saucepan over medium-high heat to reach a depth of 10cm. To test when oil is ready, add a cube of bread to oil – it should turn golden brown in 30 seconds. Cook mozzarella, in batches, for 2 minutes or until brown all over. Drain well on paper towel-lined tray. Serve croquettes with sauce.